Commnr.,Centralexcis vs. Gulf Oil Corpn.

Held

The Court held that the appeal stands disposed of in view of the Circular dated July 11, 2018, which sets a monetary limit of Rs. 50,00,000/- for filing appeals before the High Court. Since the tax effect in the present appeal was stated to be less than Rs. 50 lac, it fell below the revised threshold. The Court granted liberty to the Department to revive the appeal in case of difficulty. The reasoning was based on the explicit instruction from the CBIC to reduce government litigation by raising monetary limits for appeals. The ratio decidendi is that appeals with a tax effect below the prescribed monetary limits, as per CBIC instructions, should not be filed or pursued by the Department before the High Court, unless substantial questions of law are involved.

Facts

The appeal was filed by the Department against an order dated June 8, 2006, passed by the CESTAT, Kolkata. The tax effect in dispute was brought to the court's notice as being less than Rs. 50 lac. A Circular dated July 11, 2018, was issued by the Central Board of Indirect Taxes & Customs (CBIC) in exercise of its powers under Section 35R of the Central Excise Act, 1944, which was made applicable to Service Tax vide Section 83 of the Finance Act, 1994. This circular raised the monetary limits for filing appeals by the Department before CESTAT, High Courts, and the Supreme Court. The limit for filing appeals before the High Court was fixed at Rs. 50,00,000/-. The instruction applied to legacy issues relating to Central Excise and Service Tax, and to pending cases.

Key Issues

1. Whether the appeal filed by the Department is maintainable before the High Court given the monetary limit stipulated in the Circular dated July 11, 2018, issued by the CBIC, which fixes the monetary limit for filing appeals before the High Court at Rs. 50,00,000/-. The Department argued that the tax effect in the present appeal is less than Rs. 50 lac, falling below the revised monetary limit. The Revenue (Department) contended that the appeal should not be entertained based on the new monetary threshold. The Court was to decide if the appeal, with a tax effect below the stipulated limit, should be pursued by the Department.